In this week's Off The Cuff podcast, Chris and Mish discuss:
- Looks Like We'll Need A Bigger Bazooka
- Draghi hints at more QE
- The Schizophrenic Fed
- Exploring both raising & lowering rates
- No Rationality Left
- Depression-level results RAISES stocks?
- Banning Physical Cash
- Still the plan of the central bank cartel
Last week, Caterpillar reported a year-over-year decline in revenue of -19%. Nearly a fifth of its revenue vaporized — poof! — over 12 months. That's an unmitigated disaster for the company, and a frightening indicator of the size of the global economic slowdown. So, what happened to CAT's stock price?
It jumped by 5% on the news.
What?!?!
This is an indicator that shows how divorced the financial markets have become from rationality. For years now, companies have trumped up their earnings per share numbers with share buybacks. While this kind of trickery is simple to see through, the market was happy to let itself be fooled and bid prices higher. But when revenue falls, there is no argument, not even a paper-thin one, for positivity. At that point, pure delusion is the only explanation for a higher bid.
by arthur-robey-2